U.S. Politics, 15

[TerraPrime]

Continue, please.

[Shryke]

True, but that happens regardless of whether the House Dems voted for or against this agreement. Either way, they'd expire in 2012. Opposition at this point just looks spiteful, particularly given that it will end up screwing over average Americans via excess withholdings.

I don't get what you are saying.

The bill can't be passed next session because the tax cuts are gone by then AFAIK and would need to be done afresh, which presents a whole host of issues. The GOP's best chance to keep these tax cuts around is right now. It's not spite on the House Dem's part, because stopping them being extended is a serious blow and not one the GOP can easily turn-around in a month like you suggested.

[Former Lord of Winterfell]

I don't get what you are saying.

The bill can't be passed next session because the tax cuts are gone by then AFAIK and would need to be done afresh, which presents a whole host of issues.

I don't think it presents any real issues at all. You simply ramp it up as the first item of business and vote it through, which shouldn't be tough because the President and Republican leadership -- which is the same now as it will be after the election -- support it. But the GOP will now get to claim that Democrats were willing to let a massive tax increase on all Americans go through, and only the GOP saved them.

The GOP's best chance to keep these tax cuts around is right now. It's not spite on the House Dem's part, because stopping them being extended is a serious blow and not one the GOP can easily turn-around in a month like you suggested.

Shryke, I'd be willing to bet that the old rates are reinstated before the second week of February. This is a PR godsend to the GOP.

[Shryke]

I don't think it presents any real issues at all. You simply ramp it up as the first item of business and vote it through, which shouldn't be tough because the President and Republican leadership -- which is the same now as it will be after the election -- support it. But the GOP will now get to claim that Democrats were willing to let a massive tax increase on all Americans go through, and only the GOP saved them.

Shryke, I'd be willing to bet that the old rates are reinstated before the second week of February. This is a PR godsend to the GOP.

Except the GOP won't control both houses, remember?

Once it's about making new tax cuts instead of keeping old ones, the game shifts. There may be less Democrats willing to give the GOP another "lowered your taxes" victory and the "GOP wants to cut taxes for millionaires" rhetoric can ramp up better.

And this will also force people back to the bargaining table. The only reason these extensions have support is because of the UI extension after all. The President is "behind them" in that he supports the deal to get those, not beacuse he supports the cuts on his own.

The whole thing here is that Obama cut the Dems in Congress out of the loot and took their support for granted. They are now quite pissed, both about that and the tax cuts themselves, and are flexing their muscles to at the very least, get more out of the deal.

[Former Lord of Winterfell]

Except the GOP won't control both houses, remember?

Sure they won't. But the bill was going to pass in the Senate anyway, both the GOP and Democratic leadership will be the same, just with a significantly larger GOP minority. How does that not support the idea that it will sail through the Senate?

Once it's about making new tax cuts instead of keeping old ones, the game shifts. There may be less Democrats willing to give the GOP another "lowered your taxes" victory and the "GOP wants to cut taxes for millionaires" rhetoric can ramp up better.

Well, I guess we'll just have to wait and see how it plays out. I think it highly unlikely enough Senate Dems will flip to kill the deal, but hey, if they want to hand the GOP a huge majority in 2012, that's fine with me. The only problem is that it would completely screw over the country, so I hope that doesn't happen.

[alguien]

I was kind of surprised that Obama made this tax extension deal (for the above 250K) with GOP leadership in the first place, since the majority of the American public opposed it. The only thing I could think of is that he thought that the trade-off (passing these other bills) was somehow worth it, that he would be gaining PR by being seen as "working" with Republicans, etc. I disagree, and feel its somewhat politically self-serving for him.

This new development in the House, however, is surprising. I can think of several scenarios, both good and bad, that result.

[Shryke]

The deal was all about the UI extension. And keeping the lower/middle-class tax cuts too, though I'd say to a lesser degree.

The GOP wouldn't pass UI extension without extending all the tax cuts. Shit, they are refusing to vote on anything till tax cuts get handled (stalling DADT repeal, DREAM act, 9/11 Health Care Bill, just to name some obvious ones)

[Altherion]

I don't think it presents any real issues at all. You simply ramp it up as the first item of business and vote it through, which shouldn't be tough because the President and Republican leadership -- which is the same now as it will be after the election -- support it.

I would estimate there is about a 70% chance that if this is not solved in 2010, then in 2011, the House (now controlled by Republicans) will try to push Obama & Co. beyond what is currently on the table. I'd give it about a 50% chance that they push too hard.

[Jon Sprunk]

This is a PR godsend to the GOP.

I'd argue this is a PR nightmare for the GOP. They have to pass a UI extension (it's political suicide in this economic climate not to). They know this, but they want to make the dems bend over backwards to get it. If the dems actually stand up against this, it forces the GOP to either rethink their position and pass UI on it's own (because Pelosi is too smart not to call for a vote on it before the recess), or pray that voters will forget 2 years from now. (Rather, they hope they can tell enough lies to make it look like the dems' fault.)

The funny thing is, Obama can't lose in this fight. He already made the gesture of reaching across the aisle, so he gets kudos from the moderates. If it passes he gets all the credit for brokering the deal, and if it doesn't he can always blame congress.

[lokisnow]

This reminds me of the first vote for TARP when it didn't pass because congress was flexing. I think this more political positioning for the House than anything and that it will pass 90% the same by christmas. It's too good a bargain for the democrats to pass, but politically they need to be seen opposing it first, just to reassure the base. If message control gets out about that the deal is a great one--basically it grants every tax wishlist item the democrats want and far fewer of the wishlist items the republicans want--then things will shift and the House will see themselves as having enough cover to pass it the week of Christmas. I could see some minor modifications going the dems way in this, to give themselves a cover of victory, a few percentage points change in the estate tax, perhaps instating a millionaire's tax bracket in 2013 1-2 percent higher than where the 165,000+ top bracket is). Things like that.

I'm actually a bit reassured by the squabbling, if they'd just passed it, I'd be a little more freaked out and frustrated and angry at the government for colluding behind closed doors. This vote could create a public debate over the particulars, which will probably move a lot of republican support away from it but solidify democrat support of it. It will also give democratic strategists a chance to head off and OWN the way the debate will be framed (this, however, seems about as likely as pink unicorns dancing on the whitehouse lawn, I mock myself for believing the democratic party has any foresight or message control) to avoid the framing Nate Silver predicted.

[awesome possum]

But the GOP will now get to claim ...

This is a PR godsend to the GOP.

And this is what's wrong with the Republican party, perfectly encapsulated in FLoW's attempted gloating. To the GOP, it's not about policy or helping make the country better. It's about being able to claim this and getting publicity for elections. It may yet work, it certainly did this last election, but the country will suffer because of it.

[The Marquis de Leech]

I'd argue this is a PR nightmare for the GOP. They have to pass a UI extension (it's political suicide in this economic climate not to).

Nah, they'd just claim that UI extension is socialist.

[Shryke]

Question: Am I right that the only reason there is any need to compromise from the Dem perspective is because of 59 and not 60 in the Senate?

Essentially. Although if they did have 60 Senators they'd just be watering shit down for the deficit hawks or the like instead of just going nowhere because of the GOP.

Coco's boy and mine Simon Johnson was asked about the plan in the compromise on NPR this morning. He said that it was a very bad idea. I assume he was only referring to economics and not politics. But it was such a short interview that there was little elaboration on the why. I remain torn.

Basically, if you believe the tax cuts aren't going to ever be repealed if they get extended (a good assumption I think we can all agree), you are looking at a huge increase to the deficit.

Krugman was talking about it on his blog, but I remember the number being something like an extra $4 trillion in debt over the next decade and then it just gets worse from there.

Ahh, found it:

America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.

And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.

So the potential cost of giving in to Republican demands is high. What about the costs of letting the tax cuts expire? To be sure, letting taxes rise in a depressed economy would do damage — but not as much as many people seem to think.

http://www.nytimes.com/2010/12/06/opinion/06krugman.html?_r=2&partner=rssnyt&emc=rss

Repeal of DADT got 57 yes votes and 40 no votes, which means it didn't pass. What a logical Senate structure we have!

Technically it gets 58 votes actually, since Reid would have voted for but, due to insane parlimentary rules in the Senate, has to vote against if the bill is about to fail or they can't reintroduce the bill again.

[Commodore]

I'm still somewhat torn. I don't want the tax cut extension for the 250+ crowd, but I do think this is somewhat of a stimulus package, and it may be the only one we could get politically. We'll see.

http://online.wsj.com/article/SB10001424052748703493504576007522687470638.html

But they've gone FDR and John Steinbeck one better. In the world of the Grapes of Wrath Democrats now gagging over Barack Obama's "sell-out" to the rich, the new economic royalists aren't limited to "the Ishmael or Insull." Now it's any single person or married couple in America with a pre-tax income at $200,000 or $250,000.

Will the nation's new economic royalists step forward, rope in hand, to produce enough economic activity to help Mr. Obama to a second term of retribution? Maybe not. According to the National Association of Manufacturers, some 70% of manufacturing concerns in the U.S. have owners whose business is taxed at the individual rate (S corporations and the like). These are the people expected to commit capital to new hires and equipment.

But if an angry, let-me-be-clear Barack Obama just looked into the cameras and said he's coming to get you in two years, what rational economic choice would you make? Spend the profit or gains 2011 might produce on new workers, or bury any new income in the backyard until the 2012 presidential clouds clear?

No matter how much economic bump Mr. Obama gets in 2011 from extending the Bush-era tax rates, the 2012 election will be fought over a deep national anxiety that he rightly identifies but misinterprets.

The 1936 Democrats argue that America can't be strong again until what they identify as "2% of taxpayers" are dragged from their homes and punished. It's a stirring tale that is irrelevant to the immediate needs of a United States that has to compete in a global economy of intense and volatile competition.

In such a high-stakes world, Barack Obama's obsession with having it out over the tax tables is a vulnerability. His opponent in 2012 should run straight at it.

[Andriy Czarchenko]

Question: Am I right that the only reason there is any need to compromise from the Dem perspective is because of 59 and not 60 in the Senate?

You´re wrong. They only have 58 seats atm. :bang:

[Former Lord of Winterfell]

http://online.wsj.com/article/SB10001424052748703493504576007522687470638.html

I'm not sure whether people don't believe that stuff will happen, or just don't care. Business expansion/investment is not controlled solely by demand, and anyone who thinks that just doesn't understand how businesses operate. Expansion and investment always entail a certain degree of risk and costs, and how businesses evaluate those risks and costs can materially affect their decisions to expand or not. For capital expansion in particular, they tend to look more than a year or two down the road.

I think all of that is particularly true for privately held companies, where the owners are making decisions directly, and whose personal financial futures are tied up with their company's.

[Altherion]

http://online.wsj.com/article/SB10001424052748703493504576007522687470638.html

This goes from implausible to downright absurd. An example of the latter:

Barack Obama is a Class Warrior with every fiber of his being. And he isn't happy.

That Monday tax deal had to be the worst day of Barack Obama's presidency. I'd be surprised if this most insouciant of presidents was able to sleep Monday after the statement he issued at the White House about the deal. That was no mere statement. It was a class warrior's cry from the heart.

:lol: Obama the class warrior? The man whose every significant policy was negotiated in advance with the big businesses it would affect? Whose economic team is composed of people from Wall Street and from large banks? Seriously? :rofl:

Henninger & Co. should lay off the propaganda. At the rate the economy is currently going, there's a non-negligible probability of a real class warrior becoming prominent in the next 5 years or so and unlike Obama, this will not go well for these guys.

[Swordfish]

I've read him for about a year, and a couple of times Simon Johnson has chimed in on the political battles in DC but got shouted down by his blog's audience because he's an economist, not a political analyst. He makes lousy predictions on politics. On economics, he's obviously very intelligent.

I didn't hear the interview, but I'm sure he was referring to the economics.

As for that 4 trillion figure, I think Shryke's reference is right on.

What bothers me is that the Obama administration is reauthorizing this massive, ginormous tax break for those who don't need it, and then saying that next year we're going to have a "national conversation" about deficits. How the hell can he say that with a straight face? I didn't see him saying that shit when the Federal Reserve printed 5 trillion dollars to bail out the banks.

At least with TARP, one can argue that you had government money chasing somewhat efficient job growth. As a stimulus program, this tax break is a joke. He sounds schizophrenic when he praises the Simpson Bowles and the Catfood Commission while simultaneously jacking our federal budget up by another trillion dollars in the next 3 years.

Because they don't really care about the deficit?

I mean, does that REALLY shock you?

[Shryke]

I've read him for about a year, and a couple of times Simon Johnson has chimed in on the political battles in DC but got shouted down by his blog's audience because he's an economist, not a political analyst. He makes lousy predictions on politics. On economics, he's obviously very intelligent.

I didn't hear the interview, but I'm sure he was referring to the economics.

As for that 4 trillion figure, I think Shryke's reference is right on.

What bothers me is that the Obama administration is reauthorizing this massive, ginormous tax break for those who don't need it, and then saying that next year we're going to have a "national conversation" about deficits. How the hell can he say that with a straight face? I didn't see him saying that shit when the Federal Reserve printed 5 trillion dollars to bail out the banks.

At least with TARP, one can argue that you had government money chasing somewhat efficient job growth. As a stimulus program, this tax break is a joke. He sounds schizophrenic when he praises the Simpson Bowles and the Catfood Commission while simultaneously jacking our federal budget up by another trillion dollars in the next 3 years.

The tax break on the wealthy is a joke of a stimulus, but remember that he's only supporting that because of the OTHER shit in the compromise. The tax break for the wealthy is the price for the extension of UI and the lower/middle-class tax breaks.

And TARP and the Stimulus and the like have been discussed to death already. It's perfectly reasonable to support measures like that and still be concerned about the deficit.

Considering the idiots on that Debt Commission I'd say he's overly concerned.

[Swordfish]

:laugh: Okay, okay, you got me: no, it doesn't really surprise me that American politicians and the aristocracy are perfectly willing to sacrifice retirees and young people to save their own asses.

*phew*

You had me worried for a second.

;)